Pre-deposit waiver in service tax dispute accepted on prima facie exemption claim for cargo handling of agricultural produce.

A prima facie case for waiver of pre-deposit was found in a service tax dispute involving cargo-handling activity connected with wheat. The appellants relied on an earlier finding that the service was not clearing and forwarding service and that the earlier demand was time-barred, contending that the extended period could not be used for the later period. They also argued that the service related to agricultural produce and fell within the exemption under Notification No. 10/2002-S.T. On the material placed, pre-deposit was waived during pendency of the appeal.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit in respect of the service tax demand, including the plea that the service related to cargo handling of agricultural produce and was covered by exemption.

Analysis: The appellants relied on the earlier finding that the service did not amount to clearing and forwarding service and that the earlier demand was time-barred, and contended that the extended period could not be invoked for the later period. It was also pointed out that the service rendered in relation to wheat was in the nature of cargo handling service and that Notification No. 10/2002-S.T. provided exemption for such service when rendered for agricultural produce. On the material placed, a prima facie case for relief from pre-deposit was found.

Conclusion: The requirement of pre-deposit was waived during the pendency of the appeal.

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